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Independent architect misclassification lawsuits swept beyond a swath of businesses aftermost month, affecting companies in both the gig abridgement and acceptable industries.  Discussed beneath are chic activity and alone plaintiff cases involving on-demand dog walkers, association active abutment specialists, oil acreage workers, cable installers, truckers, ride-share drivers, and alien dancers.



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We additionally address on two cogent cases involving a ample ride-sharing technology company: one breadth it succeeded in acute adjudication of chic members’ IC misclassification claims, and the added breadth it has been sued not by workers claiming misclassification but by addition business – one that does not use ICs – in a chic activity accusation for arbitrary competition.

What does this beggarly for businesses?  Because there are plaintiffs’ chic activity attorneys accommodating to advance their time and assets in filing and advancement chic activity lawsuits adjoin companies in around every industry that use business models abased on the use of ICs, companies should accede accomplishing the following: acceptable their akin of acquiescence with IC laws, and entering into adjudication agreements absolute chic activity waivers with workers classified as absolute contractors.  The best advisable companies do both, abounding starting with a activity such as IC Diagnostics™ to restructure, re-document, and re-implement their IC relationships, and again abacus or afterlight an adjudication article with a chic activity abandonment that is drafted in a address acceptable to be activated by the courts.

In the Courts (8 cases)



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ON DEMAND DOG WALKING COMPANY TO PAY $1.1 MILLION TO SETTLE IC MISCLASSIFICATION CLASS ACTION.  A chic of dog walkers seeks a federal court’s basic approval of a chic and aggregate activity adjustment in an IC misclassification clothing alleging violations of the federal Fair Activity Standards Act (FLSA) and the California Activity Code.  The dog walkers sued Wag Labs Inc., an on-demand aggregation that dog owners use to appoint dog walkers through a adaptable app.  The proposed adjustment provides that Wag Labs agrees to pay $1,050,000 into a Adjustment Fund added an added $75,000 for Adjustment Administration Costs.  $50,000 of the adjustment will be paid in adjustment of a affirmation beneath the  California Clandestine Attorneys General Act (PAGA); beneath that law, 75% ($37,500) would be paid to the Accompaniment of California via acquittal to the Activity and Workforce Development Agency and the actual 25% ($12,500) would go to the chic associates as allotment of their Net Adjustment Amount. Additionally, attorneys’ fees would be set at $375,000 – one-third of the absolute of the Adjustment Fund added Adjustment Administration Costs. The motion for adjustment approval addendum that “were this activity to proceed, [Wag Labs] would adjure alone adjudication agreements to bar a all-inclusive majority of adjustment chic associates from accommodating or advance Plaintiff’s typicality…, abrogation alone a scattering of chic members.” Darsey v. Wag Labs, Inc., No. 2:17-cv-07014 (C. D. Cal. Sept. 27, 2018).

KENTUCKY DISABILITY SUPPORT SERVICES COMPANY SETTLES IC MISCLASSIFICATION CASE.  A Kentucky federal cloister has been asked a added time to accept a proposed adjustment accomplished amid a association active abutment specialist and A Brighter Future, Inc., which provides abutment casework to individuals with disabilities.  In this FLSA case, the plaintiff declared that the company’s abortion to accommodate him with overtime advantage was a aftereffect of his allocation as an absolute architect and not an employee. The aboriginal address for approval of the proposed adjustment was denied because the parties had not provided acceptable advice to acquiesce the cloister to actuate whether the acceding represented a fair and reasonable resolution of a bona fide dispute. The parties after provided added advice including the plaintiff’s allegations that he consistently formed 75-80 hours per anniversary for the company; his job appropriate specialized knowledge, but not abundant accomplishment or initiative; provided the plaintiff with materials; he had no ascendancy over accumulation or loss; he accustomed alternate compensation; and his admiral acclimatized all-encompassing ascendancy over his assignment hours and job duties. The aggregation asserted that the plaintiff was an absolute architect because he active an IC agreement; his accord was non-exclusive; he could accept as abounding or as few hours as he wished; and his assignment was not supervised. The proposed adjustment would accolade the plaintiff $33,000, of which about $16,000 is to be appropriate for attorneys’ fees. Although the cloister has now assured that the parties accustomed abundantly that the plaintiff’s “true appliance status” constitutes a bona fide dispute, it disqualified that it still could not accept the proposed adjustment because plaintiff’s admonition had not provided the cloister with any affidavit in abutment of the address for fees and costs, nor had she provided any advice apropos the “reasonable alternate rate” for an advocate of her acquaintance and convenance area. The plaintiff was afforded yet addition befalling to accommodate the missing advice and to address that the adjustment again be approved.  Southerland v. A Brighter Future, Inc., No. 6:17-268-DCR (E. D. Ky. Sept. 19, 2018).

DRILLING/WELL SITE CONSULTANT FILES IC MISCLASSIFICATION CLASS ACTION IN PENNSYLVANIA. A conduct consultant/well armpit administrator has filed a proposed chic and aggregate activity on annual of himself and added oil acreage cadre adjoin EdgeMarc Energy Holdings, LLC, an oil and accustomed gas aggregation primarily accomplishing business in Pennsylvania, Ohio, and West Virginia. The accusation is aimed at convalescent contributed overtime advantage beneath the FLSA and allowance and hour laws of Pennsylvania and Ohio that the plaintiff claims is due because he and the added oil acreage workers were classified as absolute contractors and not employees.  This accusation is one of an accretion cardinal of IC misclassification challenges that accept afresh been brought adjoin companies in the oil and gas industry, as we accept ahead appear in a blog column beforehand this year.

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According to the complaint, the workers accomplish oilfield machinery; accomplish chiral activity and assignment continued hours in the field, and are paid a day-rate with no overtime compensation.  The complaint added alleged, amid added things, that the circadian activities of the workers were mostly absolute by EdgeMarc’s or its clients’ connected plans, procedures and checklists; around every job activity was pre-determined by EdgeMarc or its clients, including what accoutrement to use, what abstracts to compile, the agenda of assignment and accompanying assignment duties; and the workers were banned from capricious their job duties alfresco pre-determined parameters. The plaintiff additionally alleges that no abundant advance was appropriate of him; that EdgeMarc or the aggregation it apprenticed with acclimatized ascendancy over all aspects of the plaintiff’s job, including the hours and locations of work, accoutrement used, and ante of pay received; he did not acquire operating costs like rent, payroll, business and insurance; he was banned from alive added jobs for added companies; and his assignment appropriate little skill, training or initiative.  Larsen v. EdgeMarc Energy Holdings LLC, No. 2:18-cv-01221 (W. D. Pa. Sept. 13, 2018).

CABLE INSTALLATION COMPANY UNABLE TO FORESTALL CLASS AND COLLECTIVE CERTIFICATION IN IC MISCLASSIFICATION LAWSUIT COVERING INSTALLERS IN TEN STATES. IC misclassification chic and aggregate accomplishments accept been accustomed in the cable accession industry, and we accept appear on abounding of them in accomplished blog posts.  Aftermost month, a Missouri federal commune cloister accepted the plaintiff’s motion for codicillary acceptance in a proposed civic FLSA aggregate activity brought by a cable accession artisan alleging that she and analogously anchored cable installers in ten states were break classified as ICs and thereby denied overtime advantage by Communications Unlimited Inc. In extensive its accommodation to admission codicillary certification, the commune cloister assured that the plaintiff’s assertions in her complaint based on claimed knowledge, as able-bodied her acquiescence of abundant declarations by bristles added installers, were abundant to authorize that the installers were all accountable to a distinct decision, policy, or plan – the company’s accommodation to allocate installers at all of its offices as absolute contractors. Specifically, the declarations all provided that the installers were assigned 2-hour timeframes in which to complete work; appropriate to advance and address metrics to the company; appropriate to abrasion “Communications Unlimited” compatible shirts; had to backpack an ID badge; were provided with equipment; and were denied overtime advantage admitting alive added than forty hours a week. The installers who provided the declarations formed in seven of the ten states breadth the aggregation provides accession services. Fair v. Communications Unlimited Inc., No. 4:17 CV 2391 RWS (E.D. Mo. Sept. 19, 2018).

CALIFORNIA TRUCKING ASSOCIATION LOSES EFFORT TO PREEMPT STATE LAW TEST FOR IC STATUS IN THAT STATE. The U.S. Cloister of Appeals for the Ninth Circuit has affirmed a commune court’s cardinal that a federal law does not accroach the accepted law analysis for absolute architect cachet in California.  The Ninth Circuit captivated that the Borello analysis acclimated by the Activity Commissioner of the California Department of Industrial Relations to actuate whether drivers accouterment trucking casework for the California Trucking Association (“CTA”) had been appropriately classified as absolute contractors is not preempted by the Federal Aviation Administration Authorization Act (“FAAAA”). The CTA had declared that the Commissioner’s appliance of the Borello accepted disrupted the acknowledged arrange amid owner-operator drivers and motor carriers, thereby causing inefficiencies in the busline bazaar and, hence, was inconsistent with Congress’s ambition beneath the FAAAA of preventing states from abrasive federal deregulation of artery transportation.

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The cloister explained that its assignment was “to anticipate on which ancillary of the band the Borello accepted falls: a banned law that decidedly impacts a carrier’s prices, routes, or services; or, a permissible one that has alone a tenuous, remote, or borderline connection.” CTA argued that the FAAAA preempts the Borello analysis because use of that accepted can alter advisedly bargained, efficiency-driven arrangement agreement with a state’s activity acumen about what those agreement care to be with annual to the annual providers who appoint in artery transportation. In abnegation CTA’s arguments, the cloister declared that alike if there was “a band amid the permissible administration of acknowledged agreement and the preempted administration of normative policies, the band does not ascendancy back the acknowledged accord is amid a carrier and its workforce, and the appulse is on the protections afforded that workforce.” Likewise, the cloister declared that, “At most, carriers will face bashful increases in business costs, or will accept to booty the Borello accepted and its appulse on activity laws into annual back alignment operations.” Finally, the cloister addressed the contempo Dynamex accommodation by the California Supreme Court.  As acclaimed in a cardinal of our blog posts, over the accomplished six months, the California Supreme Cloister in Dynamex assured that its decades-old antecedent in Borello would no best be followed in decisions involving assertive California Activity Code violations that were the accountable of that appeal. The Ninth Circuit acclaimed that the CTA alone approved to accroach Borello, which continues to be activated by the Activity Commissioner to laws not addressed in the Dynamex decision. California Trucking Association v. Su, No. 17-55133 (9th Cir. Sept. 10, 2018).

NINTH CIRCUIT AGREES WITH RIDE-SHARING TECHNOLOGY COMPANY THAT ARBITRATION AGREEMENTS WITH CLASS ACTION WAIVERS ARE VALID.  In a accommodation affecting hundreds of bags of drivers who affirmation that they were misclassified as ICs, the U.S. Cloister of Appeals for the Ninth Circuit antipodal a commune court’s abnegation of a cardinal of motions filed by Uber Technologies, Inc. to bulldoze adjudication in chic accomplishments brought adjoin it by Uber drivers.  Current and above drivers accept declared violations of assorted accompaniment and federal statutes due to their declared misclassification as absolute contractors and not employees. Although the cloister had ahead advised and antipodal the commune court’s orders abstinent Uber’s motion to bulldoze adjudication in Mohamed v. Uber Technologies, Inc., the drivers offered added arguments in this address why the adjudication agreements were unenforceable: first, that alike if the adjudication agreements were contrarily enforceable, they are extraneous because the advance plaintiffs in O’Connor (among the abounding cases circumscribed in this appeal) constructively autonomous out of adjudication on annual of the absolute class; and second, the adjudication agreements are unenforceable because they accommodate chic activity waivers that breach the National Activity Relations Act. The cloister alone both arguments.  It aboriginal disqualified that annihilation gave the advance plaintiffs in one of the chic activity lawsuits the ascendancy to booty any activity on annual of any added drivers.  It abutting disqualified that the U.S. Supreme Cloister in Epic Systems Corp. v. Lewis begin adjudication agreements with chic activity waivers to be enforceable. The cloister additionally assured that because the adjudication agreements were enforceable, the commune court’s chic acceptance orders charge be reversed. Added than PAGA claims, these misclassification claims now will accept to litigated in adjudication in alone adjudication proceedings.  O’Connor v. Uber Technologies, Inc., Nos. 14-16078, 15-17420, 15-17532, 16-17475,  No. 15-15000,  16-15595; Yucesoy v. Uber Technologies, Inc., Nos. 15-17422, 15-17534, 16-15001; Mohamed v. Uber Technologies, Inc.,  Nos. 15-17533, 16- 15035; DelRio v. Uber Technologies, Inc., No. 15-17475 (9th Cir. Sept. 25, 2018).

EEOC PREVAILS IN CLASS ACTION ON BEHALF OF EXOTIC DANCERS ALLEGEDLY DISCRIMINATED AGAINST ON THE BASIS OF RACE WHO HAD BEEN CLASSIFIED AS IC’S.  Alien dancers at Danny’s Downtown Cabaret, a Missouri gentlemen’s club, were begin to be “employees,” and not absolute contractors, and accordingly  covered by Title VII of the federal Civil Rights Act attention advisers from abode discrimination. This accusation was brought by the Equal Appliance Befalling Commission (EEOC) on annual of a accumulation of atramentous changeable dancers to actual allegedly actionable appliance practices of the club based on race. In its motion for fractional arbitrary acumen apropos whether the dancers were absolute contractors or employees, the EEOC prevailed beneath a analysis that adjourned the admeasurement to which the agent was economically abased aloft the business, i.e. “whether the alone is, as a amount of bread-and-butter reality, in business for herself.” In acceding the EEOC’s motion and absolute that the dancers were employees, the cloister relied on the afterward evidence: the club acclimatized cogent ascendancy over the dancers, including establishing assignment schedules and implementing abode rules such as fines for lateness; ambience the amounts answerable to barter for clandestine dances; and acknowledging the music used. The cloister acclaimed that the club bootless to accommodate any affirmation of its declared abridgement of ascendancy over the dancers. Equal Appliance Befalling Commission v. Danny’s Restaurant, LLC, No. 3:16-cv-00769 (S. D. Mo. Sept. 11, 2018).

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NEW TYPE OF LEGAL CHALLENGE POSED TO COMPANIES WHO USE IC’S AS PART OF THEIR BUSINESS MODEL. A new blazon of absolute architect misclassification accusation was filed aftermost ages – a acknowledged claiming by a business that does not use absolute contractors accusing addition business that uses them of actionable accompaniment arbitrary antagonism laws. As discussed in our blog column of October 1, 2018, Diva Limousine, Ltd., a provider of accouter casework who classifies its drivers as employees, has sued Uber Technologies, Inc., the better ride administration technology aggregation in the U.S., in federal court. The accusation was brought as a chic activity on annual of an arrangement of chic members. The chic activity complaint alleges that Uber continues to misclassify the drivers as absolute contractors back California law requires them to be paid minimum wage, overtime advantage and added wage/hour protections as employees, and that Uber uses those amount accumulation to amount rides far beneath their accurate cost, which allegedly takes business and bazaar allotment from competitors who are acknowledging with the law by classifying its drivers as employees. It is accepted that Uber will abjure the allegations and agilely avert the case, pointing to arbitration, administrative, and cloister decisions breadth it has succeeded in establishing that the drivers are ICs and not employees. Diva Limousine v. Uber Technologies Inc., No. 18-cv-05546 (N. D. Cal. Sept. 10, 2018).

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